I know. Last week I suggested that I was done talking about the economy for a while. But I just can't resist returning to the subject thanks to the Institute for Supply Management announcement on Tuesday that the U.S. manufacturing sector grew 8% in August from the July number of 48.9. I know. Last week I suggested that I was done talking about the economy for a while. But I just can't resist returning to the subject thanks to the Institute for Supply Management announcement on Tuesday that the U.S. manufacturing sector grew 8% in August from the July number of 48.9. The August figure 52.9 beat the expert's estimate of 50.5, rising to a three-year high. Is that the sound of champagne corks I hear popping?
The Manufacturing Index is a closely monitored number that when above 50 represents expansion. We have been waiting for this kind of news for months, as it is a good measure of what we have been feeling, but could not quantify, Things are getting better folks.
Oh yeah, the naysayers that I referred to in the My View editorial appearing in the September issue of ILS are already cautioning that manufacturing may not be able to sustain this positive news. My answer to this is, so what, we’ll have 30 days of sunshine while they dwell in the darkness.
Why the optimism? New orders were up 10%, the highest level since December 2004. And experts are saying that we can expect reasonable rates of growth for the balance of 2009. Inventories are still very low, leading some to suggest that just restocking the larder may keep the index positive for the rest of the year.
Wall Street, the great contrarians, didn't like the good news, responding with a loss of 100 points as this blog was posted. So who cares about the Street? They are supposed to be futurists, six months in the future, so why are they all of a sudden reacting negatively to today's good news. And other than those still playing the market, who cares, we are too making proposals and getting ready to book orders.
I still think we are going to see a faster-than-expected return to improved year end numbers by the laser industry. A record recession, worst since 1937-1938, could mean a record recovery. My advice: get your Plan B up and ready to be implemented in the fourth quarter. Fabtech, occurring right in the middle of the quarter, may be better than we had hoped. Pull out the stops and start promoting your new lasers and systems.